China: Bills Being Reviewed by the State Council, Including the Foreign State Immunity Law
The fifth session of the Standing Committee of the Fourteenth National People’s Congress (NPC) is being held from 28 August to 1 September in Beijing. In accordance with the schedule of the session, the Standing Committee considered nine legislative bills, mainly including the draft revision of the Administrative Reconsideration Law, the draft Law on Immunity of Foreign States, the draft revision of the Civil Procedure Law, the draft revision of the Company Law, and the draft Value-Added Tax Law; and the State Council’s motions on the consideration of the draft Pre-school Education Law, and the draft Academic Degrees Law. Below is a summary of the revision of several major laws that are submitted to this session for consideration.
The third draft revision of the Administrative Reconsideration Law - In June 2023, the third meeting of the Standing Committee of the Fourteenth NPC conducted a second review of the draft revision of the Administrative Reconsideration Law. The following major changes are proposed in the third review draft submitted for consideration at this session: 1) strengthening the safeguards and requirements for the performance of administrative reconsideration. It stipulates that the composition of administrative reconsideration committees and the specific methods for carrying out their work should be formulated by the administrative reconsideration bodies under the State Council; 2) enhancing the ability of administrative reconsideration to absorb administrative disputes and further expanding the scope of administrative reconsideration; 3) increasing the administrative reconsideration application convenience initiatives, and facilitating the applicants’ filing for administrative reconsideration through Internet, or through the administrative organs which make the administrative penalty on the site, and requiring the administrative organs to inform the administrative reconsideration of the relevant circumstances when making administrative acts; and 4) further improving the administrative reconsideration jurisdiction system. It provides that those who are dissatisfied with the administrative acts of the judicial administrative departments of the local governments may apply for administrative reconsideration to the government at their own level, or to the judicial administrative department at the next higher level; higher-level administrative reconsideration organs may, as needed, hear administrative reconsideration cases under the jurisdiction of lower-level administrative reconsideration organs.
The second draft revision of the Law on Immunity of Foreign States - The legislative work plan of the Standing Committee of the NPC for the year 2023 includes the law on immunity of foreign state as a legal item for continued consideration. The Ministry of Foreign Affairs, in conjunction with relevant departments, prepared the draft law on foreign state immunity, which was initially reviewed in December 2022. After the initial review, the draft was issued online for public comments. In the light of the deliberations of the Standing Committee and the views of various parties, the draft has been revised and improved, and is to be submitted to the Standing Committee for further consideration at its fifth session.
The second draft revision of the Civil Procedure Law - In December 2022, the thirty-eighth meeting of the Standing Committee of the thirteenth session of the NPC conducted an initial review of the draft amendments to the Civil Procedure Law. The second draft submitted for consideration at this session proposes the following major amendments to the foreign-related section: 1) improving the relevant provisions on the territorial jurisdiction of foreign cases; 2) properly coordinating the issue of conflict of jurisdiction and improving the relevant provisions; 3) improving the provisions on the delivery of service in foreign cases; 4) improving the criteria for determining the jurisdiction of the foreign court, and 5) adding provisions on convergence with the law on immunity of foreign states.
The draft revision of the Company Law - In December 2022, the thirty-eighth meeting of the Standing Committee of the thirteenth session of the NPC conducted a second review of the draft revision of the Company Law. The third draft submitted for consideration at this session proposes the following major amendments: 1) improving the registration system for the contribution of registered capital, by stipulating that the amount of capital contributed by the shareholders of a limited liability company shall be paid in full within five years from the date of the establishment of the company; 2) improving the provisions on democratic management of the company; 3) further strengthening the protection of shareholders’ rights; 4) further strengthening the regulation of controlling shareholders and de facto controllers; 5) improving the provisions relating to corporate bonds; and 6) improving the provisions on legal liability.
The second draft Value-Added Tax Law - In December 2022, the thirty-eighth meeting of the Standing Committee of the thirteenth NPC conducted the initial review of the draft VAT law. The second draft submitted for consideration by this session proposes the following major amendments: 1) upgrading the existing relevant policy provisions into law, and enriching and improving the small-scale taxpayer system; 2) refining and clarifying the specific circumstances of simplified tax calculation; 3) specifying the scope and requirements for authorizing the State Council to formulate special preferential policies 4) clearly stating that taxpayers have the right to independently choose the treatment of tax credits; 5) clarifying that the amount of VAT shall be separately stated on the transaction vouchers in accordance with the provisions of the State Council, and 6) further standardizing the relevant tax legislation authorization provisions in accordance with the provisions of the Legislative Law and the requirements of the principle of tax legislation.